Setting up a company / d.o.o. in Croatia to buy a property

The company is set up before a notary, who must be given details of the company's founders, its name, registered office and the business activities it will carry out. After the company is founded, the notary files the documents with the commercial court and the company is established within a short time (a few days). A bank account must then be opened, and business can begin.

Buying agricultural land in Croatia:

Setting up a company (d.o.o.) in Croatia is advisable if you are buying agricultural land as well as the house, as a moratorium on the sale of agricultural land to foreign natural persons was in force until 1 July 2023. In practice, however, it is not yet clear whether a foreign natural person can acquire ownership of agricultural land.

Letting property in Croatia and taxation:

Setting up a company is also advisable for people who want to let property in Croatia for tourist purposes. In particular because if you earn more than 39,816.84 euros a year from letting (update 2026: since 2025 the turnover threshold for flat-rate taxation has been 60,000 EUR a year) (below this threshold there is a flat-rate tax, also known as a bed tax, which varies by municipality and amounts to between 350 EUR and 1,500 EUR per bed per year), you automatically enter the VAT system by law. This means that the landlord has to pay income tax based on actual income and expenses. The income tax rate is 20 % for amounts up to 47,780.28 EUR a year (update 2026: since 2025 the lower rate has applied up to 60,000 EUR a year). For higher amounts the rate is 30 %. By contrast, the profit tax rate for companies is 10 % for amounts up to 995,421.06 EUR and 18 % for higher amounts (update 2026: since 2023 the threshold has been 1,000,000 EUR).

Letting a property in Croatia through a d.o.o. also offers greater scope for incentives and business development. As legal persons, landlords are better placed to apply for incentives from the Ministry of Tourism and for EU funding under the Rural Development Programme and the Competitiveness and Cohesion Programme. In addition, when setting up a d.o.o., you can register a wide range of business activities. This way, people who also want to do other business in Croatia can register several activities at the same time without incurring additional costs later.

A brief note: if the buyer of the property is a national of a third country (outside the EU), the company's share capital must be at least 26,550.00 EUR. This foreign national must also employ at least 3 Croatians in the company. The advantage of such a company is that the foreign national can obtain a one-year residence and work permit in Croatia in the process. The residence and work permit are renewed every year, and after 5 years it is possible to obtain a long-term residence permit. This information comes from the law firm Vaic & Dvornicic in Rijeka: www.vaic.hr